Legal Articles

Fresh From the Bench: Precedential Patent Cases From the Federal Circuit

Overview

Ariosa - Verinata's patent claims methods of noninvasive prenatal testing for the presence of fetal chromosomal abnormalities. Ariosa petitioned for two inter partes reviews. The Board instituted the IPRs but ultimately concluded that Ariosa had not met its burden of proving obviousness. The panel vacates and remands for further consideration because the Board's decision was not clear as to its handling of Exhibit 1010, a prior art brochure. Specifically, if the Board refused to consider Exhibit 1010 as teaching the state of knowledge of the art because it was not one of the pieces of prior art cited in the petitions as defining a combination for obviousness (it was merely cited in expert declarations submitted with the petitions as showing the state of the art), then this is reversible error. But the Board also pointed out that the supporting declarations say little about the relevance of Exhibit 1010, such as why a skilled artisan would have had a reasonable expectation of success in achieving the suggested combination and modification. The panel holds that if this was the reason for the Board rejecting Ariosa's reliance on Exhibit 1010, that might be entirely appropriate. Because the Board is in a better position to assess the reasons for its handling of Exhibit 1010, the panel remands the case and Ariosa has another opportunity to challenge the validity of Verinata's patent.

Verinata owns a ‘430 patent, which claims methods of noninvasive prenatal testing for the presence of fetal chromosomal abnormalities. Ariosa petitioned for IPR of claims 1-18 and, in a separate petition, claims 19-30. The Board initiated both IPRs but ulitimately concluded that Ariosa had not met its burden of proving that claims 1-18 and 19-30 would have been obvious.

Verinata and Ariosa are competitors in the field of noninvasive prenatal diagnostics, which includes testing for fetal chromosomal abnormalities. For many years, prenatal chromosomal testing required invasive, high-risk procedures, such as amniocentesis. Noninvasive tests, based on the combination of ultrasound observation and measurement of biochemical markers in blood samples drawn from the pregnant woman, suffered from low accuracy. The 1997 discovery of cellfree fetal DNA circulating in maternal blood suggested the possibility of superior noninvasive tests.

Verinata's '430 patent describes a counting technique applied to an overall pool of DNA segments selected for comparing a chromosome of concern with a reference chromosome, making the comparison by identifying the respective DNA sequences. Fetal aneuploidy may be determined by comparing the number of sequences generated from the chromosome of concern with the number of sequences generated from a reference chromosome counting copies from all cell-free DNA, whether fetal or maternal. But because cell-free fetal DNA is such a small proportion of total cell-free DNA, the elevation in the target-sequence count will be small in an overall sample; and for the numerical elevation to be significant and sufficiently reliable for prenatal testing, a large sample must be created and sequenced. The '430 patent describes doing so by amplifying the target and reference sequences, pooling samples from several women and indexing them for later identification, and using massively parallel sequencing.

The Circuit Reverses and Remands Because the Board May Have Refused to Consider the Illumina Brochure for the Wrong Reason

Ariosa's principal challenge is to the Board's treatment of Exhibit 1010, an Illumina brochure. Ariosa argues that the Board erred in refusing to consider Exhibit 1010 for what it showed about knowledge that a skilled artisan would have possessed at the time of filing, particularly about DNA indexing. We agree that the Board's language leaves open the possibility that the Board incorrectly limited its consideration of Exhibit 1010.

The Board's language on its face supports Ariosa's interpretation of what the Board meant—that the Board was declining to consider Exhibit 1010, even as evidence of the background understanding of skilled artisans, simply because the brochure had not been identified at the petition stage as one of the pieces of prior art defining a combination for obviousness. If that is what the Board meant, the Board erred. Art can legitimately serve to document the knowledge that skilled artisans would bring to bear in reading the prior art identified as producing obviousness.

Ariosa included Exhibit 1010 in its Petitions as an exhibit to Dr. Nussbaum's declaration. Dr. Nussbaum stated that "as of 2008, indexed multiplexing was so widespread as a technique that the company Illumina, Inc. offered a commercially available kit for production and analysis of indexed libraries from different samples of origin," and the indexed libraries could have been "analyzed on a commercially-available massively parallel sequencing platform sold by the same vendor." Ariosa's second expert, Dr. Morton, also named the Illumina sequencing system when discussing the state of the art of massively parallel sequencing, although she did not specifically refer to Exhibit 1010. The Petitions then cited portions of Dr. Nussbaum's and Dr. Morton's declarations for the same proposition—that "massively parallel sequencing methods were in routine use by 2008." Given those references, Exhibit 1010 had to be considered by the Board even though it was not one of the three pieces of prior art presented as the basis for obviousness.

That the language of the Board regarding Exhibit 1010 is readily susceptible of being read to rest on an incorrect legal proposition, by itself, does not require setting aside the Board's decisions. We may affirm an agency ruling if we may reasonably discern that it followed a proper path, even if that path is less than perfectly clear. We also may affirm if an erroneous portion of an agency's ruling is ultimately non-prejudicial, i.e., not material to the bottom-line result given other portions of the agency's ruling. 5 U.S.C. § 706; 28 U.S.C. § 2111. But we must not ourselves make factual and discretionary determinations that are for the agency to make.

Here, we cannot confidently discern whether the Board, in its consideration of Exhibit 1010, was actually relying on a legally proper ground rather than the erroneous ground just noted. The Board might have been saying only that the development of the argument invoking Exhibit 1010 in the Petitions was not adequate. A PTO regulation provides: "the Board may exclude or give no weight to the evidence where a party has failed to state its relevance." 37 C.F.R. § 42.104(b)(5). In the present case, other than stating that massively parallel sequencing was known by 2008, the Petitions and supporting declarations say little about the relevance of Exhibit 1010, such as how a skilled artisan would have used what it showed about background knowledge in combining or modifying the prior-art references or how it tended to show that a skilled artisan would have had a reasonable expectation of success in achieving the suggested combination and modification.

Giving the inadequate-explanation reading to the Board's statement about Exhibit 1010, though straining the words somewhat, would fit two related aspects of the Board's decisions. First, the Board's statement followed its quotation of Dr. Morton's Reply declaration, which contains little, if any, more explanation of Exhibit 1010's role than appeared in her original declaration: "One of ordinary skill in January 2010 would be motivated to index individual samples and pool them for sequencing to maximize sequencing capacity and to minimize sequencing cost. For example, the Illumina, Inc. product flyer from 2008 states, harnessing this sequencing power in a multiplexed fashion increases experimental throughput while reducing time and cost." Thus, while Dr. Morton's Reply declaration identifies Exhibit 1010 as evincing a motivation to "index individual samples and pool them for sequencing," it does not address whether Exhibit 1010 would have motivated a skilled artisan to replace the quantification methods of Dhallan with the technique of massively parallel sequencing described by Binladen. Second, at the heart of the Board's analysis in the rest of its decisions is its finding that Ariosa provided inadequate explanation: the Petitions did not "explain how or where the references differ from the challenged claims, how one of ordinary skill in the art would go about combining their disparate elements, or what modifications one of ordinary skill in the art would necessarily have made in order to combine the disparate elements."

Yet the Board did not sufficiently articulate the foregoing grounds for its rejection of Ariosa's reliance on Exhibit 1010 or other grounds independent of the incorrect ground suggested by the Board's language. Perhaps the Board could have done so. But it did not, and we cannot do so for the Board where, as here, the matter is not purely legal.

We likewise are not prepared to find that the error we cannot rule out was non-prejudicial. We will not here draw our own conclusion about whether Exhibit 1010, if considered for what the Petitions (and supporting declarations) adequately presented about it, could have filled the explanatory gap that was the heart of the Board's reason for finding Ariosa's case unproved. Given the complexity of this area, and how seemingly small differences might be significant, we will not undertake to determine whether a proper assessment of Exhibit 1010 should lead to a reassessment of the explanatory gap. The Board is in a better position to do so. We will therefore vacate the decisions and remand.

Congress generally directed that inter partes review proceedings be completed within one year of institution. 35 U.S.C. § 316(a)(11). Reflecting that timing constraint, and the statutory goal of providing a relatively quick and low-cost alternative to litigation over validity, the PTO has established rules that, while necessarily respecting constitutional and statutory guarantees of procedural fairness, are designed generally to require that the parties make their cases in a very small number of filings with the challenger obliged to make an adequate case in its Petition and the Reply limited to a true rebuttal role. 37 C.F.R. §§ 42.104(b)(5), 42.23(b). Within this structure, even while providing for an estoppel effect on the challenger, 35 U.S.C. § 315(e), Congress assigned to the challenger the burden of persuasion in the dispute, id. § 316(e). That burden, together with the procedural rules impartially applied, means that, in some cases, a challenge can fail even if different evidence and arguments might have led to success. We leave to the Board the determination of what remand proceedings are appropriate given the governing policies.